Mastering the business of patents: How understanding the stable EPO approach to patent eligibility for business method and software inventions could improve your success rates in Europe, the U.S. and beyond
Patent applications relating to business methods such as advertisements, e-commerce, insurance and finance can be some of the hardest to get allowed. Back in 2013, shortly before the Alice decision was handed down, 56% of all U.S. patent applications in this area of technology were granted. Even then this was low compared to the 100% in areas of technology such as Data Processing. Fast forward to 2016 and this already low allowance rate had fallen to just 11.1%. Since then rates have been increasing, as both attorneys and USPTO examiners get to grips with the new rules, but even as the pendulum starts to swing back to the centre ground, allowance rates remain disappointingly low.
In Europe the allowance rates at the EPO for business methods are consistently the lowest of all fields of technology, but the reasons for both success and failure are arguably much clearer than in the U.S. For many years, the EPO’s approach to assessing business methods and software inventions has been standardised and consistent. Where we see failure at the EPO is when applications are drafted without knowledge of the EPO approach. The good news is that it's possible to ensure that your applications have the best possible chance of succeeding in Europe by following a few simple rules. In addition, we have seen that applying these rules when drafting can also have a positive impact in other jurisdictions such as the U.S.
With that in mind, here are four key things to consider when drafting business method, software or other applications relating to subject matter on the borderline of patent eligibility. As will become apparent, the four steps are linked, and so provide a handy step-by-step structure to guide your thought process as you draft a new patent specification.
What features of the invention are technical?
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Whether or not a feature is “technical” is a fundamental concept in Europe.
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Claim features which are not technical will not be considered when the EPO assesses inventive step.
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Therefore, when deciding how to characterise an invention, it is of the utmost importance that as many technical features as possible are included in the claims.
It can sometimes be tricky to work out whether or not a feature is technical. To help with that, consider…
Who is this feature going to impress?
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To work out whether a feature (or an invention more generally) is technical, it can be useful to ask yourself “who would be impressed by the functionality provided by this feature?”.
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If the answer is “an engineer”, “a computer programmer” or “a product designer”, then it is likely that the feature provides a technical benefit and will be considered technical by the EPO.
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If the answer is “a businessperson”, “an administrator”, or “a consumer”, however, then the feature most likely provides business and/or administrative advantages and should therefore not be the focus of the claims and application as a whole.
To bring out the technical aspects of your invention, it will likely be necessary to describe these aspects in as much detail as possible. To help with that, consider…
How do the technical parts of the invention work?
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The application obviously needs to explain how the invention works. However, the bulk of the detail of the application should relate to explaining how the technical innovations work.
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When assessing the application, the EPO will have little interest in the finer details of how the non-technical (e.g. business) aspects work, and so these can be discussed in less detail.
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In fact, when assessing whether or not your invention has a “technical effect” the EPO will ignore any non-technical application of the invention and just focus on the underlying technical innovation. If your technical innovation is inextricably linked to the specific non-technical innovation, then getting a patent granted in Europe is likely to be very difficult. As such, consider including examples of alternative applications for your technical innovation to show that there is no inextricable link.
When describing features and implementations, the aim should be to make them sound as innovative and technically advantageous as possible. To help with that, consider…
Why is a particular technical feature or implementation advantageous?
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When assessing inventive step, the EPO places a considerable amount of value on whether or not a particular feature provides a technical advantage. In software-based business method applications technical advantages include reducing things such as bandwidth, processing power, and memory usage or improving processing speed or capabilities.
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It is very beneficial to list as many technical advantages as possible throughout the application.
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One way to ensure you do this is to get into the habit of describing the benefits provided each time a new feature or arrangement is introduced for the first time.
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Another good idea is to set your stall out early – describe the technical problems which the invention addresses early on in your application to get the EPO on your side.
Some quick-fire tips:
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If in doubt, get advice from your trusted European advisor at an early stage. A brief review at the initial drafting stage before priority filing can pay dividends further down the line.
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It might not always be possible to “fix” applications for Europe at a later stage due to the strict approach taken by the EPO in relation to added subject matter.
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The European standard for examining inventive step is generally regarded as one of the strictest. This means that if your application is set up to succeed in Europe, it should be best placed to succeed elsewhere as well!
If you would like to have a word with Nick or Benni to discuss a patent query relating to software, electronics and emerging disruptive technologies, contact insights@kilburnstrode.com and we will put you in touch.